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Editorial leader, The West Australian, 21 Apr 03

"Treaties of any sort between nations invariably require concessions and compromises, but the economic benefits that would be gained from a bilaterial free trade agreement with the US would not be worth the price if they required us to jettison any part of Australia's social values or distinctive cultural heritage."

 

Hidden Hazards in Trade Deal

Few developments will be so crucial to Australia's cultural identity and economic success for the rest of this century as the negotiations that have begun over the drawing up of a free trade agreement with the United States.

The achievement of such an agreement within the next few years has become one of the major policy objectives of the Howard Government, and the proposal is also backed strongly by the business communities in both countries.

Attempts to get a trade deal have been going on for years, prompted largely on Canberra's part by moves among East Asian countries towards preferential regional trade agreements that might exclude Australia.

In the past the US-Australia trade liveralisation talks have foundered on resistance from the US's powerful farm lobby. However, there is unspoken acceptance that Australia's steadfast support for US military action in Iraq may have improved our bargaining position.

The US is involved in similar negotiations and exploratory talks with Singapore and Chile as well as a number of central American and southern African countries, and unless Australia is moved to the head of the queue, a bilateral agreement could still be a few years away.

From the most optimistic viewpoint, it would be an unalloyed victory for Australia, giving us improved access to the global powerhouse economy and boosting our Gross Domestic Product by up to $4 billion a year.

One supporter has described the treaty as a potential "economic freeway, with liberated capital flows, free movement of people, two-way deal flows, research interchanges and widespread networking".

However, the proposed agreement has also drawn out detractors whose objectives range from the effect it will have on our relationships with countries in the region, to fears that it will encourage American cultural imperialism and interference in Australian social policy.

The US is Australia's most important economic partner. Two-way trade and two-way investment is greater than with any other single country.

However, East Asia, led by Japan, still buys more than half of Australia's exports comared with the US's 10 per cent. The Asians can hardly be expected to remain relaxed about losing a share of the Australian market to the US, as would seem likely to happen.

More likely to create alarm in Australia however, is the US bargaining position which has raised the Foreign Investment Review Board, Australian content rules in film and television, the pharmaceutical benefits scheme and our high quarantine standards as barriers to trade.

These are all sacred cows designed to protect Australian culture, health, safety and public interest. They are strongly supported by a majority of Australians and should not be open to negotiation with the representatives of another country.

Treaties of any sort between nations invariably require concessions and compromises, but the economic benefits that would be gained from a bilaterial free trade agreement with the US would not be worth the price if they required us to jettison any part of Australia's social values or distinctive cultural heritage.